Local-option revenue could help buy land for key projects

CEDAR RAPIDS - The City Council's Budget Committee on Friday backed the use of some  local-option sales tax revenue to help cover the cost of buying land to build a new library, new Time Check Recreation Center, new Central Fire Station and a new Animal Control facility.

All four existing city buildings were destroyed in the June 2008 flood, however, disaster funds from the Federal Emergency Management Agency are not sufficient to pay all the costs to replace them.

Local-option sales tax revenue can help fill the funding “gaps” for the building projects, Mayor Ron Corbett explained to the committee on Friday morning.

Corbett noted that FEMA, for instance, will provide $3.5 million for the purchase of the new library site, now occupied by TrueNorth Companies across Fourth Avenue SE from Greene Square Park, while the purchase cost of the site is $7.5 million. Another sliver of land for the library will cost an estimated $200,000, he added.

The four-member committee agreed that the ballot language in the referendum approved by voters in March 2009 allows the use of local-option sales tax revenue for such city building projects when the language states that the revenue can be used to match federal dollars used for flood recovery.

Corbett also made the case for using local-option sales tax revenue to help purchase land for the new Convention Complex, also called the Event Center. The initial budget had put the land cost for that project at $3 million while the actual costs is now closer to $8 million when business-relocation expenses are included with land-purchase costs.

However, council member Kris Gulick did not think that the $75.64-million Convention Complex project was a true flood-recovery project. He agreed that the existing U.S. Cellular Center arena, the upgrade of which is part of the project, had been damaged by the June 2008 flood, but he said that damage has already been repaired with federal and state disaster funding. Gulick said the city might have built the Convention Complex even without the flood.

Corbett countered, saying that the $35-million federal grant for the Convention Complex from the federal Economic Development Administration was a disaster grant and so met the ballot language.

Council member Chuck Wieneke called it a “gray area,” while council member Don Karr said Corbett's view made sense.

However, for now, the mayor said the city would move ahead with a proposal to use some of the sales tax revenue to help with land purchases for the library, fire station, recreation center and animal control facility, but not, the Convention Complex.

The one-percent, local-option sales tax is expected to bring in at least $78 million for flood recovery over the 63-month life of the tax.

The City Council now has obligated $66 million of the tax revenue, but council member Chuck Wieneke, who is the council liaison to the council-appointed Local-Option Sales Tax Oversight Committee, said the actual obligation is somewhat less. Corbett thought it was closer to $50 million.

Little of the money would have been spent to date but for the Corbett-led program to give flood-impacted homeowners and renters direct payments to replace possessions lost in the flood. That is likely to take up nearly a third of $78-million in revenue.

Corbett said he will address the citizen Oversight Committee at its December 2 meeting about using local-option sales tax revenue for land purchases related to flood recovery.

A majority of committee said the ballot language approved of such a use of the money.

The committee, which was created to review council decisions after they have been made, now is being asked to weigh in before the decisions are made.